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As part of the province’s pre-budget consultations, CUPE Newfoundland and Labrador has told the finance minister he should look around the world for lessons in how best to respond to economic challenges.

CUPENL President Wayne Lucas says, “The clear lesson is that spending cuts and austerity are not the answer. Even the International Monetary Fund (IMF) has concluded that the negative impacts of austerity and spending cuts are considerably larger than first anticipated.”

The CUPE brief cites an IMF study, Fiscal Multipliers and the State of the Economy released in December 2012, which analyzed decades of data on the world’s major industrialized countries.

Says Lucas, “The study found that it’s much better to deal with deficits by increasing taxes, rather than implementing drastic austerity budget cuts.”

The brief goes on to suggest that an overdependence on exports of raw resources - such as oil and minerals - for economic growth is putting the province’s economy into a precarious situation for the future. While commodity prices may generate economic booms, they are inevitably followed by busts, CUPE argues.

The union suggests the province needs much more balanced economic policies to achieve sustained economic growth.